Employer vs. Individual Health Insurance

individual health insurance

Employer Vs. Individual Health Insurance

Health insurance has become a necessity in the lives of most Americans, as it would be nearly impossible to recover from the bills of an extended hospital stay or procedure.

In the past, there was a huge dependence on the employer health plan. The employer would do all the work with choosing the insurance company and the health plans available. There have always been constant changes within the health care sphere. These changes include employers having to cut health insurance benefits due to the bumpy economy, as rising health care costs have meant that more of the financial burden is on the employee, and advancing technologies are being offered at higher prices.

These changes have prompted more people to purchase individual health insurance, also known as personal health insurance. Opposite of the employer health plan, the individual can choose their own providers, plans, and do their own research.

When deciding on how to approach the topic of health insurance, there should be an understanding of the differences between employer and individual health insurance. We will be diving into those differences below.

Employer Health Insurance

Employer health insurance, also known as group health insurance, like mentioned above, is handled by the employer. They do the research, choose the insurance providers, and the health plan options. One of the advantages of employer-sponsored health insurance is that they typically assist with the monthly premiums. There are a few other benefits that include the removal of the stress affiliated with searching for the perfect plan, and the premiums are deducted from pre-tax pay. This means that you are paying your insurance before federal and state taxes are deducted, which lowers your taxable income.

Individual Health Insurance

On the other hand, the individual health insurance option allows the person to have more control over their family’s health care coverage. They can choose to purchase a plan through a few different avenues. The first is purchasing a plan through the Marketplace, which is run by the federal government. You may be eligible to receive a cut on the cost dependent on your household size and income. The other way to purchase a plan is obtaining a private plan directly through insurance companies, brokers, agents, or online. There are some great advantages associated with purchasing your own health insurance plan. They include your coverage not being tied to your job so there is no fear of loss of coverage, you can choose a plan that has your preferred doctors and hospitals, and you may qualify for more affordable coverage.

In terms of price, in 2020 the average cost of a group health insurance plan for a single person was $7,470 a year, while an individual health insurance plan was about $5,472 a year. It is also important to keep in mind that a lot of individual health insurance plans are seeing downward trends on costs, and group plan costs are increasing.

Ultimately, having health insurance is the goal and whether you choose to move forward with employer health insurance or purchasing an individual plan, there are benefits to both. It is all dependent on your particular set of circumstances.


We hope this information on employer vs. individual health insurance is helpful to you.

Empower Brokerage is dedicated to helping you educate your clients on the insurance they need and staying on top of their health. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans. We want you to be successful. Give us a call if you have any questions 888-539-1633.

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